Ca2+/calmodulin-dependent phosphoprotein phosphatases (also called PP2B or calcineurin) have been characterized extensively in vitro, however little is known about their regulatory activities in vivo. The immunosuppressive drugs FK506 and CyclosporinA associate with calcineurin in vitro (in conjunction with immunophilin proteins) suggesting that calcineurin may play an important role in T-cells, and that these drugs may inhibit T-cell function through their modulation of calcineurin activity. The aim of the proposed research is to understand the functions of calcineurin in yeast, (a simple organism that offers many experimental advantages), which may provide insight into the role of this enzyme in more complex eukaryotes. We purified a calcineurin-like activity from the yeast Saccharomyces cerevisiae, and isolated three genes encoding components of this activity that are homologs of mammalian calcineurin subunits. The first goal of this study is to characterize these yeast calcineurin subunits further, by examining their interactions, localizations and post-translational modifications, and determining whether they are the sole components of yeast calcineurin. Genetic analysis indicates that yeast calcineurin regulates the mating response. Haploid yeast cells initially respond to mating pheromone through a signal-transduction pathway, by undergoing morphological changes and G1 growth arrest, but eventually cells become refractory to this stimulus, and resume vegetative growth. Calcineurin mutants are unable to adapt to the pheromone signal, and once arrested, fail to reenter the cell cycle. Adaptation to a continuous stimulus is a fundamental property of many biological responses, including vision and olfaction, as it enables the cell to respond to subsequent stimuli. Receptor-mediated adaptation mechanisms have been described in higher eukaryotes, but additional modes of desensitization probably exist. Inhibition of the yeast response to pheromone is known to occur by multiple, independent mechanisms, although the biochemical bases of these mechanisms are mostly uncharacterized. To study the role of calcineurin in adaptation we will: 1) characterize the pheromone response of calcineurin mutants in more detail to define where in this response calcineurin acts to promote adaptation, and 2) study the mechanism of calcineurin action using genetics to identify components that are necessary for calcineurin-promoted adaptation, and using biochemistry to directly identify substrates of calcineurin in this process.